The European Union's top economic official on Tuesday criticised a British proposal to slash corporate tax to less than 15 percent following the nation's vote to abandon the bloc.
Britain's finance minister George Osborne said at the weekend he would seek to slash corporation tax to under 15 percent over fears of a corporate exodus following the June 23 referendum to leave the European Union.
The 28-nation EU gave a frosty reception to the plan, however, saying it would raise the threat of a competitive series of corporate tax cuts as countries try to lure firms to their shores.
"Going to 15 percent does not seem to me to be a good initiative," the EU's economic affairs commissioner, Pierre Moscovici, told French radio station Radio Classique.
EU Commissioner of Economic and Financial Affairs, Taxation and Customs Pierre Moscovici gives a statement, with Greek Finance Minister, during an Eurogroup meeting in Luxembourg on June 16, 2016.
"We should not enter into exacerbated fiscal competition between ourselves, or fiscal dumping," Moscovici said in the first public reaction by the bloc to Osborne's proposal.
The British finance minister revealed his plan in an interview with the Financial Times published on Sunday evening. The Treasury confirmed the comments to AFP.
Prior to the Brexit vote, British tax rates on corporate profits were already set to be cut from 20 percent to 19 next year and to 17 percent in 2020.
But the new target, which has no timetable, would give Britain the lowest rates of any major economy, and put it closer to the 12.5 percent rate in EU member Ireland.
"We must focus on the horizon and the journey ahead and make the most of the hand we've been dealt," Osborne told the Financial Times.